Manchester travel firm helping aid workers secures private equity backing
Manchester-based specialist travel company Diversity Travel has received investment from private equity backer Primary Capital, with debt funding from Thin Cats.
The business was started by travel industry entrepreneur Harish Sodha, who built and then sold Key Travel in 2005, and offers travel management services to organisations within the humanitarian, education and non-profit sectors.
A refugee from Idi Amin’s murderous regime in Uganda in the 1970s, Sodha was one of the 60,000 mainly Gujarati Indians expelled by Amin, 27,000 of whom settled in the UK as refugees.
He set up Diversity Travel as a specialist business to provide a particular niche service to aid agencies and charities operating in tough spots around the world.
Overall Diversity Travel employs over 300 people with offices in Manchester (UK) and Washington DC (USA).
The UK business turned over £6.25m and recorded pre tax profits of £339, 246 in the last set of accounts, to 31 March 2022, but also noted that the total value of sales of the business amounted to £81m, supporting over 900 clients.
Primary Capital aren’t revealing how much they have paid, or how much Sodha has taken off the table, however, Alec Parkinson from Primary Capital told TheBusinessDesk.com: “Harish has not had day-to-day involvement for a number of years now, with Chris Airey leading the business (as he will continue to do). This transaction enables Harish to realise some of the value he has built in the business.”
Parkinson also clarified that the year ending 31 March 2022 was heavily Covid-impacted with limited international travel permitted. “It’s a real credit to the team that they remained profitable through such a difficult period and the financial performance has improved markedly over the subsequent 18 months as those restrictions lifted and their charitable, not-for-profit and academic customers were able to travel again,” he said.
Pre-Covid the business made profits of £2.3m in 2019 on turnover of £9.1m and made £1.7m on £7.8m in 2018.
The company’s portfolio of services includes airline reservations, hotel reservations, UK, European and international rail, 24-hour in-house emergency team, management information, risk management services, consultancy services, online booking and educational groups and conference travel.
As well as founder Harish Sodha, who owned over 75% of the business, Chris Airey, Matt Truin and Sarah Burrows form Diversity’s management team.
Sodha said: “I am deeply proud of the organisation we have built since founding Diversity in 2008. Primary shares our vision for the business and, with their support, I look forward to seeing Diversity continue to thrive and offer a world-class service to the programmes and clients with whom we work.”
Primary has provided significant equity finance alongside management, with Thincats providing debt facilities to support the buyout.
Peter Liney, an experienced travel sector executive, also joins the company as non-executive chair to support management and Primary. He has held strategic roles at British Airways prior to becoming chief executive of STA Travel and, latterly, Great Rail Journeys. He is on the board of several other travel operators and a Trustee of English Heritage.
Founded in 2008 with headquarters in Manchester, Diversity also boasts proprietary technology which enables clients to increase traveller policy compliance and fulfil their duty of care obligations.
The business also provides educational tours for student groups under the Diversity Study Trips brand.
The investment into Diversity continues Primary’s strong track record of investing in high-quality B2B sector leaders. Alec Parkinson, Pete Lyons and David Richard led the investment for Primary.
Chris Airey, Diversity’s chief executive, said: “We are excited to announce this investment and to partner with Primary as we embark on the next chapter of our development. We look forward to continuing to support customers and building Diversity into a truly global operator across the markets and geographies we serve.”
Alec Parkinson, Partner at Primary, commented: “Diversity provides global travel management services for some of the world’s leading humanitarian and academic organisations, with a clear customer-focused service proposition and a strong track record of growth. We are thrilled to be working with Chris and the Diversity team to support the company’s next stage of growth through investment in technology, international expansion and service offering development.“
Diversity was advised by Houlihan Lokey, Addleshaw Goddard and Travel Trade Consultancy. Primary were advised by Clearwater International, Cooley and Evelyn Partners. Alvarez & Marsal, Kroll, Travology, Highwire and Vista provided due diligence services. ThinCats was advised by Pinsent Masons.